There is not much to say about the

There is not much to say about the performance of the market today, the US equities stayed in a bullish mood however the emerging markets showed mixed results and it might raise some concerns about the underlying conditions.

We have received a low inflation figure which would allow the FED to keep the QE as it is since there is no real heat on this front – inflation targeting, anyone remembers? But still, the financial repression is working with such a low figure anyway, burning millions of dollars day by day.

I also have two interesting and quite relating articles:

http://business.financialpost.com/2013/06/17/pena-nieto-plans-end-to-75-year-pemex-monopoly-in-oil-production/?__lsa=b08f-2c99

First of all I have to say that reducing the market share of the government is generally the right thing to do, especially when a monopoly is being replaced by multiple competitive private companies.

“Pena Nieto is preparing for the return of international oil companies to arrest eight years of decline in crude output” – not to mention that the government is an inefficient owner, but the timing is not a coincidence because it started to matter when there is also a decline in anticipated oil prices (more on that later) and a structural reform becomes a necessity in order to be able to keep up with the increasing competition both locally and worldwide.

“It’s obvious that Pemex doesn’t have the financial capacity to be in every single front of energy generation” – way more costly for the taxpayers to protect the status quo

http://www.bloomberg.com/news/2013-06-18/americans-exporting-more-oil-first-time-since-70s.html

“Output is putting the nation on pace to surpass Saudi Arabia as the world’s largest producer by 2020” – if the US were a net exporter and the largest producer then it would mean that the global economical and political dynamics are shifting. The regimes supported by oil revenues will have to face a challenging time (with a lot of consequences) and in the same time the EU ought to replace the US in the Middle East if they want to maintain some kind of stability in oil supply.

“Advances such as hydraulic fracturing are leading to record production that may outstrip refinery capacity within 18 months to three years” and “We haven’t really had the time to get the infrastructure going to catch up with the vast increase in domestic production” – So it`s a fair assumption to think this will lead to a huge amount of new investments in the refinery industry which also boosts the economy.

“Net petroleum imports now account for about 40 percent of demand, down from 60 percent in 2005” – in only 8 years, amazing pace

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s